Fossil fuel stocks have boomed (.dMIWO0OG00PUS) since Russia's invasion of Ukraine in February 2022 sent fossil fuel prices soaring, leaving the performance of environmental, social and governance (ESG) funds lagging.
Pure-play renewable energy stocks such as Orsted (ORSTED.CO) and First Solar (FSLR.O) have also fallen sharply this year as higher interest rates and inflationary pressures squeeze profitability.
European oil and gas companies including BP (BP.L) and Shell (SHEL.L) have increased renewable energy investment, although they are expanding production of dirtier energy too.
Sustainability-minded investors, Müller said, needed more disclosures from firms about their plans for shifting to lower-carbon models, and regulatory clarity on labelling transition-focused funds.
Morningstar estimates that 45% of funds have exposure to traditional energy, totalling 7 billion euros ($7.6 billion).
Persons:
Markus Müller, Müller, Tommy Reggiori Wilkes, Susan Fenton
Organizations:
Deutsche Bank's Private Bank, Reuters, BP, Shell, ISR, Morningstar, Investors, Deutsche, Investment Office, Thomson
Locations:
Ukraine, France, Europe